EXECUTION COPY
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ASSET PURCHASE AGREEMENT
BETWEEN
BONE, MUSCLE AND JOINT, INC.
AND
LAUDERDALE ORTHOPAEDIC SURGEONS
Effective as of April 1, 1997
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EXHIBITS
Exhibit A - Xxxx of Sale
Exhibit B - Assignment and Assumption Agreement
SCHEDULES
1.1(a) - Medical Equipment
1.1(b) - Furniture, Furnishings, Trade
Fixtures, and Office Equipment
1.1(c) - Equipment Leases
1.1(d) - Supplies
1.1(e) - Accounts Receivable
1.1(f) - Office Leases
1.1(g) - Deposits
1.1(h) - Additional Items
2.2 - Allocation of Purchase Price
3.1(b) - Seller Consents
3.1(c) - Claims
3.1(d) - Litigation
3.2(b) - Buyer Consents
Definitions
The following terms which may appear in more than one Section of this Agreement
are defined at the following pages:
TERM PAGE
---- ----
A/R Amount.......................................................... 7
A/R Balance......................................................... 7
A/R Collections..................................................... 7
A/R Shortfall....................................................... 8
Accounts Receivable................................................. 2
Affiliate........................................................... 19
Assignment and Assumption Agreement................................. 4
Assumed Obligations................................................. 3
Xxxx of Sale........................................................ 4
bulk sales laws..................................................... 20
Business Day........................................................ 26
Buyer............................................................... 1
Buyer Indemnification Event......................................... 19
Buyer Indemnified Persons........................................... 20
Claims.............................................................. 11
Closing............................................................. 18
Closing Date........................................................ 18
Collections......................................................... 34
Determination Date.................................................. 7
Excluded Assets..................................................... 3
Excluded Obligations................................................ 4
Final Statement..................................................... 8
Indemnified Persons................................................. 20
Indemnifying Person................................................. 20
Losses.............................................................. 20
Management Services Agreement....................................... 1
Permitted Liens..................................................... 11
Purchase Price...................................................... 7
Purchased Assets.................................................... 2
Related Agreements.................................................. 15
Seller.............................................................. 1
Seller Indemnification Event........................................ 20
Seller Indemnified Persons.......................................... 21
Signature Date...................................................... 1
Statement of Allocation............................................. 7
Subject Business.................................................... 1
Threshold Month..................................................... 8
THIS ASSET PURCHASE AGREEMENT is
entered into as of May 6, 1997 (the
"Signature Date"), effective as of April 1,
1997, between BONE, MUSCLE AND JOINT, INC.,
a Delaware corporation (the "Buyer"), and
LAUDERDALE ORTHOPAEDIC SURGEONS, a Florida
partnership (the "Seller").
A. The Seller is engaged in the business (the "Subject
Business") of providing orthopedic medical and surgical services and related
medical and ancillary services to patients.
B. The Buyer is engaged in the business of providing
management, administrative, financial, marketing, information technology, and
related services to professional medical organizations.
C. Concurrently herewith, the Seller and the Buyer are
entering into a Management Services Agreement (the "Management Services
Agreement"), pursuant to which the Buyer will furnish to the Seller management,
administrative, and related services.
D. The Seller desires to sell, transfer, convey and assign to
the Buyer and the Buyer desires to purchase from the Seller, certain of the
assets, properties, interests in properties and rights of the Seller used in the
Subject Business upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements hereinafter set
forth, the parties hereby agree as follows:
ARTICLE I
TRANSFER OF PURCHASED ASSETS, ASSUMPTION OF
LIABILITIES AND RELATED MATTERS
1.1. Transfer of Assets.
On the terms and subject to the conditions of this Agreement,
at the Closing (as hereinafter defined), the Seller shall sell, transfer, convey
and assign to the Buyer, and the Buyer shall purchase, assume, and accept from
the Seller, the following assets, properties, interests in properties and rights
of the Seller (the "Purchased Assets"), as the same shall exist immediately
prior to the Closing, free and clear of all Claims (as defined below) (except
Permitted Liens (as hereinafter defined)):
(a) the medical equipment owned by the Seller and listed on
Schedule 1.1(a);
(b) the furniture, furnishings, trade fixtures, and office
equipment owned by the Seller and listed on Schedule 1.1(b);
(c) the Seller's rights and interests under the equipment
leases identified on Schedule 1.1(c), subject to the Buyer's assumption of the
obligations accruing thereunder as provided in Section 1.3;
(d) the supplies described on Schedule 1.1(d);
(e) the accounts receivable described on Schedule 1.1(e)
(the "Accounts Receivable") (subject to applicable law and in accordance with
Section 1.6 hereof);
(f) the Seller's rights and interests under the office
leases identified in Schedule 1.1(f), subject to the Buyer's assumption of the
obligations accruing thereunder as provided in Section 1.3;
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(g) the deposits identified on Schedule 1.1(g); and
(h) any additional items identified on Schedule 1.1(h).
1.2. Assets Not Being Transferred.
All assets, properties, interests in properties, and rights of
the Seller not expressly identified in Section 1.1 or the Schedules referenced
therein (the "Excluded Assets") are expressly excluded from the assets of the
Seller being sold, assigned, or otherwise transferred to the Buyer.
1.3. Liabilities Being Assumed.
Except as otherwise provided herein and subject to the terms
and conditions of this Agreement, simultaneously with the sale, transfer,
conveyance and assignment to the Buyer of the Purchased Assets, the Buyer shall
assume, and hereby agrees to pay when due, those liabilities accruing after the
Closing Date under the equipment leases identified in Schedule 1.1(c) and the
office leases identified in Schedule 1.1(f) (the "Assumed Obligations");
provided, however, that any and all obligations and liabilities arising under
any such lease as of or prior to the Closing Date and any and all obligations
and liabilities arising out of or in connection with the Seller's breach of any
such lease shall, in each case, remain the obligations and liabilities of the
Seller.
1.4. Liabilities Not Being Assumed.
The Buyer is not assuming any liabilities or obligations of
the Seller (fixed or contingent, known or unknown, matured or unmatured)
whatsoever other than the Assumed Obligations. For convenience of reference, all
liabilities and obligations of the Seller not being assumed by the Buyer are
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collectively referred to as the "Excluded Obligations." The Seller hereby agrees
to pay all Excluded Obligations as and when such Excluded Obligations become
due.
1.5. Instruments of Conveyance and Transfer, Etc.
At the Closing, the Seller shall deliver (or cause to be
delivered) to the Buyer such deeds, bills of sale, endorsements, assignments and
other good and sufficient instruments of sale, transfer, conveyance and
assignment as shall be necessary to sell, transfer, convey and assign to the
Buyer, in accordance with the terms hereof, title to the Purchased Assets, free
and clear of all Claims (except Permitted Liens), including, without limitation,
the delivery of a Xxxx of Sale (the "Xxxx of Sale") substantially in the form of
Exhibit A attached hereto and the delivery of an Assignment and Assumption
Agreement (the "Assignment and Assumption Agreement") substantially in the form
of Exhibit B attached hereto. Simultaneously therewith, the Seller shall take
all steps as may be reasonably required to put the Buyer in possession and
operating control of the Purchased Assets.
1.6. Right of Endorsement, Etc.
Effective upon the Closing, the Seller hereby constitutes and
appoints the Buyer, its successors and assigns, the true and lawful
attorney-in-fact of the Seller with full power of substitution, in the name of
the Buyer, or the name of the Seller, on behalf of and for the benefit of the
Buyer, to collect all Accounts Receivable assigned to the Buyer as provided
herein, to endorse, without recourse, checks, notes and other instruments
received in payment of such Accounts Receivable in the name of the Seller, and
to institute and prosecute, in the name of the Seller or otherwise, all
proceedings which the Buyer may deem proper in order to assert or enforce any
claim, right or title of any kind in or to the Purchased Assets (provided that
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the Buyer shall not, without the consent of the Seller, initiate any such
proceeding to collect on Accounts Receivable acquired hereunder), to defend and
compromise any and all actions, suits or proceedings in respect of any of the
Purchased Assets and to do all such acts and things in relation thereto as the
Buyer may deem advisable. The foregoing powers are coupled with an interest and
shall be irrevocable by the Seller, directly or indirectly, whether by the
dissolution of the Seller or in any manner or for any reason; provided, however
that notwithstanding anything to the contrary contained herein, collections of
Medicare and Medicaid Accounts Receivable shall first be deposited into the
Medical Group Collections Account (as defined in the Management Services
Agreement) and shall thereafter be transferred to an account designated by the
Management Company in accordance with the procedures outlined in Section 5.1 of
the Management Services Agreement. Notwithstanding anything contained herein to
the contrary, the power of attorney granted to the Management Company in this
Section 1.6 shall be terminated upon the termination of the Management Services
Agreement.
1.7. Further Assurances.
The Seller shall pay or cause to be paid to the Buyer promptly
any amounts which shall be received by the Seller after the Closing which
constitute Purchased Assets, including all amounts paid to the Seller on account
of the Accounts Receivable. The Seller shall, at any time and from time to time
after the Closing, upon the reasonable request of the Buyer, execute,
acknowledge, deliver and file, or cause to be done, executed, acknowledged,
delivered or filed, all such further acts, transfers, conveyances, assignments
or assurances as may reasonably be required for better selling, transferring,
conveying, assigning and assuring to the Buyer, or for aiding and assisting in
the collection of or reducing to possession by the Buyer, any of the assets,
properties, interests in properties or rights being purchased by the Buyer
hereunder. Any expenses
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incurred in connection with the foregoing shall be borne equally by the Buyer
and the Seller.
1.8. Assignment of Leases.
Anything contained in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement or attempted
agreement to assign any office lease or equipment lease if an attempted
assignment thereof, without the consent of any other party thereto, would
constitute a breach thereof or in any way affect the rights of the Buyer or the
Seller thereunder. The Seller shall use its best efforts, and the Buyer shall
cooperate with the Seller, to obtain the consent of any such third party to the
assignment thereof to the Buyer. If such consent is not obtained, the Seller
shall cooperate with the Buyer in any arrangements reasonably necessary or
desirable to provide for the Buyer the benefits (together with the obligations
to perform) thereunder.
1.9. Condition of Purchased Assets.
The Buyer acknowledges that the Seller makes no
representations or warranties, express or implied, as to any matter whatsoever
relating to the Purchased Assets, except for the representations and warranties
expressly set forth in this Agreement, and except as set forth expressly herein,
the condition of the Purchased Assets shall be "as is" and "where is".
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ARTICLE II
PURCHASE PRICE; ALLOCATION
2.1. Purchase Price; Payment.
The purchase price (the "Purchase Price") to be paid for the
Purchased Assets shall equal the sum of the following amounts:
(a) $250,000; and
(b) $2,000,000 (the "A/R Amount"), subject to adjustment
in accordance with Section 2.3, which amount is a good faith estimate of the
aggregate face value of all Accounts Receivable outstanding as of the Closing
Date and set forth on Schedule 1.1(e).
2.2. Allocation of Purchase Price.
The Purchase Price shall be allocated among the Purchased
Assets in a statement (the "Statement of Allocation") reflecting the allocation
set forth in Schedule 2.2 attached hereto. The parties shall complete their
respective tax returns for the period which includes the Closing Date in a
manner that is consistent with the Statement of Allocation.
2.3. Accounts Receivable Payment.
The portion of the Purchase Price specified in Section 2.1(b)
is subject to adjustment as set forth below:
(a) In the event that the aggregate amount of collections
received by the Buyer in payment of the Accounts Receivable (the "A/R
Collections"), at any point prior to September 30, 1998 (the "Determination
Date"), exceeds the A/R Amount (such excess amount being referred to herein as
an "A/R Balance"), the Buyer shall pay to the Seller on the last day of
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the month occurring after the month in which the Buyer first determines such A/R
Balance exists (such month in which the Buyer determines that an A/R Balance
occurred being referred to as the "Threshold Month") an amount equal to the A/R
Balance that had accrued through the last day of the Threshold Month and, on the
last day of each month occurring thereafter through and including the
Determination Date, the Buyer shall pay to the Seller an amount, if any, equal
to the A/R Balance as of the last day of the previous month, less, in each case,
the aggregate amount previously paid pursuant to this sentence. The Buyer shall
deliver to the Seller, within 30 days after delivery of the Final Statement (as
hereinafter defined), a check in an amount, if any, equal to the A/R Balance as
of the Determination Date less the total amount of all payments made to the
Seller prior to such date pursuant to this Section 2.3(a). Within thirty (30)
days after the Determination Date, the Buyer shall furnish to the Seller a
statement (the "Final Statement") setting forth the A/R Collections, including
detail of write-offs of any of the Accounts Receivable, the remaining
outstanding balances of the Accounts Receivable, and any other detail relating
thereto as the Seller may reasonably request. If, as of the Determination Date,
the A/R Collections are less than the A/R Amount (such deficit being referred to
herein as the "A/R Shortfall"), the Seller shall pay the A/R Shortfall to the
Buyer by check in six equal monthly installments (the first payment due 10 days
after delivery of the Final Statement). The parties hereto acknowledge and agree
that after delivery of the Final Statement and payment in full of the A/R
Balance or A/R Shortfall, as the case may be, neither party shall have any other
obligation to the other party with respect to the Accounts Receivable, except
that all remaining uncollected Accounts Receivable shall be turned over to the
Seller for disposition in such manner as the Seller, in its sole discretion,
shall determine. Notwithstanding anything to the contrary contained herein, in
the event that the Management Services Agreement is terminated prior to the
Determination Date,
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such date of termination shall be deemed the Determination Date for purposes
of this Section 2.3(a).
(b) All payments by patients and third party payors shall
be accounted for on a first-in-first-out basis unless any such payment is
identified as a payment in respect of a particular invoice or otherwise is
designated as payment of a particular invoice or for a particular service.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Seller.
The Seller hereby represents and warrants to the Buyer, as of
the Signature Date hereof, as follows:
(a) Organization; Good Standing; Qualification and Power.
The Seller is a partnership duly formed, validly existing and in good standing
under the laws of the State of Florida and has all requisite power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted and as proposed to be conducted, to execute and deliver this
Agreement, the Xxxx of Sale and the Assignment and Assumption Agreement, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The Seller has delivered to the
Buyer a true and correct copy of its General Partnership Agreement as in effect
on the date hereof.
(b) Authority. The execution, delivery and performance of
this Agreement, the Xxxx of Sale and the Assignment and Assumption Agreement and
the consummation of the transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary partnership action on the part of
the Seller. This Agreement, the Xxxx of Sale and the
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Assignment and Assumption Agreement have been duly and validly executed and
delivered by the Seller and constitute legal, valid and binding obligations of
the Seller enforceable in accordance with their respective terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally. Neither
the execution, delivery or performance by the Seller of this Agreement, the Xxxx
of Sale or the Assignment and Assumption Agreement nor the consummation by the
Seller of the transactions contemplated hereby or thereby, nor compliance by the
Seller with any provision hereof or thereof will (i) conflict with or result in
a breach of any provision of the General Partnership Agreement of the Seller,
(ii) cause a default (with due notice, lapse of time or both), or give rise to
any right of termination, cancellation or acceleration, under any of the terms,
conditions or provisions of any note, bond, lease, mortgage, indenture, license
or other instrument, obligation or agreement to which the Seller is a party or
by which it or any of its respective properties or assets may be bound or (iii)
violate any law, statute, rule or regulation or order, writ, judgment,
injunction or decree of any court, administrative agency or governmental body
applicable to the Seller or any of its respective properties or assets. Except
as set forth on Schedule 3.1(b), no permit, authorization, consent or approval
of or by, or any notification of or filing with, any person (governmental or
private) is required in connection with the execution, delivery or performance
by the Seller of this Agreement, the Xxxx of Sale or the Assignment and
Assumption Agreement or the consummation of the transactions contemplated hereby
or thereby.
(c) Title to Assets, Properties, Interests in Properties and
Rights and Related Matters.
(i) The Seller has good and valid title to all of the
Purchased Assets, free and clear of all security interests, judgments, liens,
pledges, claims, charges, escrows, encumbrances, easements, options, rights of
first refusal, rights
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of first offer, mortgages, indentures, security agreements or other agreements,
arrangements, contracts, commitments, understandings or obligations, whether
written or oral and whether or not relating in any way to credit or the
borrowing of money (collectively, "Claims"), of any kind or character, except
for (i) those Claims set forth on Schedule 3.1(c) and (ii) Permitted Liens.
(ii) There does not exist any condition which materially
interferes with the economic value or use (consistent with the Seller's past
practice) of any tangible personal property included in the Purchased Assets and
such property is in good operating condition and repair, reasonable wear and
tear excepted.
(iii) The Seller has the complete and unrestricted
power and the unqualified right to sell, transfer, convey and assign the
Purchased Assets, and this Agreement, the Xxxx of Sale and the Assignment and
Assumption Agreement are sufficient to sell, transfer, convey and assign to the
Buyer all right, title and interest of the Seller in and to the Purchased
Assets, free and clear of all Claims (other than Permitted Liens) and to vest in
the Buyer good and valid title thereto.
(iv) As used in this Agreement, "Permitted Liens" shall
mean (i) any lien for current taxes not yet due and payable, (ii) liens of
carriers, warehousemen, mechanics and materialmen created in the ordinary course
of the Subject Business for amounts not yet due and payable which do not
materially detract from the value or impair the use of any property or assets,
(iii) in the case of Purchased Assets, liens incurred in the ordinary course of
the Subject Business (including, without limitation, surety bonds and appeal
bonds) in connection with workers' compensation, unemployment insurance and
other types of social security benefits and (iv) statutory landlord liens
securing rents not yet due and payable.
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(d) Litigation. Except as set forth on Schedule 3.1(d),
there are no (i) actions, suits, claims, investigations or legal or
administrative or arbitration proceedings pending or, to the best knowledge of
the Seller, threatened against the Seller, the Purchased Assets or the Subject
Business, whether at law or in equity, or before or by any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality or (ii) judgments, decrees, injunctions or orders of any court,
governmental department, commission, agency, instrumentality or arbitrator
against the Seller or affecting the Purchased Assets or the Subject Business.
The Seller has delivered to the Buyer all documents and correspondence relating
to matters referred to in said Schedule 3.1(d).
(e) Compliance; Governmental Authorizations. To the best
of its knowledge, the Seller has complied in all material respects with all
applicable Federal, state, local or foreign laws, ordinances, regulations and
orders. The Seller has all Federal, state, local and foreign governmental
licenses and permits necessary in the conduct of the Subject Business the lack
of which would have a material adverse effect on the Seller's ability to operate
the Subject Business after the Closing Date on substantially the same basis as
presently operated, such licenses and permits are in full force and effect, no
violations are or have been recorded in respect of any thereof and no proceeding
is pending or, to the Seller's best knowledge, threatened to revoke or limit any
thereof. None of such licenses and permits shall be affected in any material
respect by the transactions contemplated hereby.
(f) Disclosure. Neither this Agreement (including the
Exhibits and Schedules attached hereto), the Xxxx of Sale, the Assignment and
Assumption Agreement nor any other document, certificate or written statement
furnished to the Buyer by or on behalf of the Seller in connection with the
transactions
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contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading.
3.2. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller, as of the
Signature Date hereof, as follows:
(a) Organization, Good Standing and Power. The Buyer (i)
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) has all requisite corporate power and
authority to own, lease and operate its properties, to carry on its business as
now being conducted, to execute and deliver this Agreement and the Assignment
and Assumption Agreement, to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby.
(b) Authority. The execution, delivery and performance of
this Agreement and the Assignment and Assumption Agreement, and the consummation
of the transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement and the Assignment and Assumption Agreement have been duly and validly
executed and delivered by the Buyer, and constitute legal, valid and binding
obligations of the Buyer, enforceable in accordance with their respective terms
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally. Neither the execution, delivery or performance by the Buyer of this
Agreement or the Assignment and Assumption Agreement nor the consummation by the
Buyer of the transactions contemplated hereby or thereby, nor compliance by the
Buyer with any provision hereof or thereof, will (i) conflict with or result in
a breach of any provisions of the Certificate of Incorporation or By-laws of the
Buyer, (ii) cause a default
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(with due notice, lapse of time or both), or give rise to any right of
termination, cancellation or acceleration, under any of the terms, conditions or
provisions of any material note, bond, lease, mortgage, indenture, license or
other instrument, obligation or agreement to which the Buyer is a party or by
which it or any of its properties or assets is or may be bound or (iii) violate
any law, statute, rule or regulation or order, writ, judgment, injunction or
decree of any court, administrative agency or governmental body applicable to
the Buyer or any of its properties or assets. Except as set forth on Schedule
3.2(b), no permit, authorization, consent or approval of or by, or any
notification of or filing with, any person (governmental or private) is required
in connection with the execution, delivery or performance by the Buyer of this
Agreement or the Assignment and Assumption Agreement or the consummation by the
Buyer of the transactions contemplated hereby or thereby.
ARTICLE IV
CONDITIONS TO CLOSING
4.1. Conditions to Each Party's Obligations.
The obligations of the Seller to sell the Purchased Assets,
and of the Buyer to purchase the Purchased Assets, are subject to the
satisfaction of the following conditions unless waived in writing (to the extent
such conditions can be waived by the Seller or the Buyer, as applicable):
(a) Legal Action. No temporary restraining order,
preliminary injunction or permanent injunction or other order preventing the
consummation of the transactions contemplated hereby shall have been issued by
any Federal or state court and remain in effect. Each party agrees to use its
best efforts to have any such injunction or order lifted.
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(b) Legislation. No Federal, state, local or foreign
statute, rule or regulation shall have been enacted which prohibits, restricts
or delays the consummation of the transactions contemplated by this Agreement or
any of the conditions to the consummation of such transactions.
(c) Related Agreements. Each of the related agreements
identified in Section 4.4 hereof (collectively, the "Related Agreements") shall
have been fully executed and delivered prior to or at the Closing by all of the
parties required to execute and deliver such agreements.
4.2. Conditions to Obligations of the Buyer.
The obligation of the Buyer to purchase the Purchased Assets
is subject to the satisfaction of the following conditions unless waived in
writing (to the extent such conditions can be waived) by the Buyer:
(a) Representations and Warranties. The representations
and warranties of the Seller set forth in Section 3.1 shall in each case be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made at and as of the Closing Date.
(b) Performance of Obligations. The Seller shall have
performed all obligations required to be performed by it under this Agreement
prior to and at the Closing.
(c) Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement, the Xxxx of Sale and the
Assignment and Assumption Agreement by the Seller and the consummation of the
transactions contemplated hereby and thereby shall have been duly and validly
taken by the Seller and the Seller shall have full power and right to consummate
the transactions contemplated hereby and thereby.
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(d) Consents and Approvals. The Seller shall have
delivered to the Buyer duly executed copies of (i) consents to the assignment of
the office leases and equipment leases listed on Schedules 1.1(c) and 1.1(f) and
(ii) all other approvals, if any, required by this Agreement or the Schedules,
in each case in form and substance satisfactory to the Buyer and counsel to the
Buyer.
(e) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
Federal, state, local or foreign governmental commission, board or other
regulatory body which are required for or in connection with the execution and
delivery by the Seller of this Agreement, the Xxxx of Sale and the Assignment
and Assumption Agreement and the consummation by the Seller of the transactions
contemplated hereby and thereby shall have been obtained or made.
4.3. Conditions to Obligations of the Seller.
The obligation of the Seller to sell the Purchased Assets to
the Buyer is subject to the satisfaction of the following conditions unless
waived in writing (to the extent such conditions can be waived) by the Seller:
(a) Representations and Warranties. The representations
and warranties of the Buyer set forth in Section 3.2 shall in each case be true
and correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made at and as of the Closing Date.
(b) Performance of Obligations. The Buyer shall have
performed all obligations required to be performed by it under this Agreement
prior to and at the Closing.
(c) Authorization. All action necessary to authorize the
execution, delivery and performance of this
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Agreement and the Assignment and Assumption Agreement by the Buyer and the
consummation of the transactions contemplated hereby and thereby shall have been
duly and validly taken by the Buyer.
(d) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
Federal, state, local or foreign governmental commission, board or other
regulatory body which are required for or in connection with the execution and
delivery by the Buyer of this Agreement and the Assignment and Assumption
Agreement and the consummation by the Buyer of the transactions contemplated
hereby and thereby shall have been obtained or made.
4.1. Related Agreements.
The Related Agreements referred to in this Agreement consist
of the following:
(a) the Management Services Agreement, entered into between
the parties hereto;
(b) the Restricted Stock Agreements, entered into between
the Buyer and each of the [Eligible Parties] (as defined in the Management
Services Agreement), respectively;
(c) the Stockholder Non-Competition Agreements, entered
into among the Seller, the Buyer, and each of the [Eligible Parties],
respectively;
(d) the Assignment of Office Leases, relating to each of
the medical office premises identified on Schedule 1.1(f), entered into between
the parties hereto; and
(e) the Assignment and Assumption Agreement entered into
between the Seller and the Buyer.
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ARTICLE V
CLOSING
5.1. Date.
The closing (the "Closing") for the consummation of the
transactions contemplated by this Agreement shall be deemed to have taken place
at 12:01 a.m. on April 1, 1997 (the "Closing Date"), irrespective of the actual
date(s) and time(s) that all of the documents required hereunder are executed
and delivered.
5.2. Closing Transactions.
At the Closing, the parties shall take the actions and deliver
the documents identified in this Section 5.2. The Closing shall not be deemed to
have taken place, and the transactions contemplated by this Agreement shall not
be deemed to have been consummated, unless all of the closing transactions
identified in this Section 5.2 have been completed or waived in writing by the
parties.
(a) The Seller shall deliver to the Buyer an executed copy
of the Xxxx of Sale;
(b) Each of the parties shall execute and deliver to the
other a copy of the Assignment and Assumption Agreement;
(c) The Buyer shall deliver to the Seller the Purchase
Price payable by cashier's check or wire transfer of funds to an account
designated in writing by the Seller;
(d) Each of the parties shall execute and deliver to the
other a fully executed copy of the Management Services Agreement;
(e) The Seller shall deliver Restricted Stock Agreements
to the Buyer executed by each of the Eligible Parties, respectively, and the
Buyer shall execute and deliver to the
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Seller Restricted Stock Agreements for each of the Eligible Parties,
respectively;
(f) The Buyer shall deliver to the [Eligible Parties] stock
certificates issued in their respective names as required under the terms of the
Restricted Stock Agreements; and
(g) The Seller shall deliver to the Buyer Stockholder
Non-Competition Agreements executed by the each of the Eligible Parties.
ARTICLE VI
INDEMNIFICATION
6.1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "Affiliate", as to any person, means any other person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such person.
(b) "Buyer Indemnification Event" shall mean the following:
(i) (A) the untruth, inaccuracy or breach of any
representation or warranty of the Seller contained in this Agreement, any
Schedule or Exhibit attached hereto, the Xxxx of Sale, the Assignment and
Assumption Agreement or any certificate delivered by the Seller in connection
herewith (or any facts or circumstances constituting any such untruth,
inaccuracy or breach) or (B) the breach of any agreement or covenant of the
Seller contained in this Agreement, the Xxxx of Sale, or the Assumption or
Assignment Agreement;
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(ii) the assertion against the Buyer or any Buyer
Indemnified Person of any liability or obligation arising from, relating to, or
in any way connected with the operation of the Subject Business at any time
prior to the Closing;
(iii) the assertion against the Buyer or any Buyer
Indemnified Person of any liability or obligation arising from, relating to, or
in any way connected with any Excluded Obligation; and
(iv) any non-compliance by the Seller with the "bulk
sales laws" of Florida to the extent that such laws may be applicable to the
transactions contemplated hereby.
(c) "Buyer Indemnified Persons" shall mean and include the
Buyer, its Affiliates and their respective officers, directors, and employees.
(d) "Indemnified Persons" shall mean the Buyer Indemnified
Persons or the Seller Indemnified Persons, as the case may be.
(e) "Indemnifying Person" shall mean the Buyer or the
Seller, as the case may be.
(f) "Losses" shall mean any and all losses, claims, damages,
liabilities, expenses (including reasonable attorneys' and accountants' fees),
assessments, tax deficiencies and taxes (including interest or penalties
thereon) sustained, suffered or incurred by any Indemnified Person arising from
any matter which is the subject of indemnification under Section 6.2.
(g) "Seller Indemnification Event" shall mean (i) the
untruth, inaccuracy or breach of any representation or warranty of the Buyer
contained in this Agreement, any Schedule or Exhibit attached hereto, the
Assignment and Assumption Agreement or any certificate delivered by the Buyer in
connection
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herewith (or any facts or circumstances constituting any such untruth,
inaccuracy or breach) or (ii) the breach of any agreement or covenant of the
Buyer contained in this Agreement or the Assignment and Assumption Agreement.
(h) "Seller Indemnified Persons" shall mean and include
the Seller and its partners and employees.
6.2. Indemnification Generally.
(a) The Seller shall indemnify, defend and hold harmless
the Buyer Indemnified Persons, and each of them, from and against any and all
Losses resulting from Buyer Indemnification Events.
(b) The Buyer shall indemnify, defend and hold harmless
the Seller Indemnified Persons, and each of them, from and against any and all
Losses resulting from Seller Indemnification Events.
(c) The parties hereto agree that in the event of a
conflict between the terms of this Article VI and the terms of the Management
Services Agreement, the terms and provisions of the Management Services
Agreement shall prevail.
6.3. Assertion of Claims.
No claim, demand, suit or cause of action shall be brought
under Section 6.2 unless the Indemnified Persons, or any of them, give the
Indemnifying Person written notice of the existence of any such claim, demand,
suit or cause of action, stating with particularity the nature and basis of said
claim, and the amount thereof, to the extent known, and providing to the extent
reasonably available all written documentation relating thereto. Such written
notice shall be delivered to the Indemnifying Person as soon as practicable upon
receipt of actual knowledge of such claim, demand, suit or cause of action;
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provided, however, that the failure to provide such written notice shall not
affect the Indemnified Persons' right to indemnification hereunder if failure to
provide such written notice does not materially adversely affect the
Indemnifying Person. Upon the giving of such written notice as aforesaid, the
Indemnified Persons, or any of them, shall have the right to commence legal
proceedings subsequent to the applicable survival date, if any, for the
enforcement of their rights under Section 6.2.
6.4. Notice and Defense of Third Party Claims.
(a) In the event any action, suit or proceeding is brought
by a third party against an Indemnified Person, with respect to which an
Indemnifying Person may have liability under Section 6.2, the action, suit or
proceeding shall, upon the written agreement of the Indemnifying Person that it
is obligated with respect to such action, suit or proceeding, be defended
(including all proceedings on appeal or for review which counsel for the
defendant shall deem appropriate) and, unless otherwise provided below,
controlled by such Indemnifying Person. The Indemnified Persons shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Persons,
unless (i) the employment of such counsel shall have been authorized in writing
by the Indemnifying Person in connection with the defense of such action, suit
or proceeding, (ii) the Indemnifying Person shall fail actively and diligently
to defend such action, suit or proceeding, (iii) the Indemnified Persons shall
have reasonably concluded that such action, suit or proceeding involves to a
significant extent matters beyond the scope of the indemnity agreement contained
in Section 6.2 or (iv) the Indemnified Persons shall have reasonably concluded
that there may be one or more legal or equitable defenses available to the
Indemnified Persons which are different from or additional to those available to
the Indemnifying Person, in any of which
-22-
events the Indemnifying Person shall not have the right to direct the defense of
such action, suit or proceeding on behalf of the Indemnified Persons and that
portion of any fees and expenses of counsel related to matters covered by the
indemnity agreement and contained in Section 6.2 shall be borne by the
Indemnifying Person. The Indemnified Persons shall be kept fully informed of
such action, suit or proceeding at all stages thereof whether or not they are so
represented. The Indemnifying Person shall make available to the Indemnified
Persons and their attorneys and accountants all books and records of the
Indemnifying Person relating to such action, suit or proceeding and the parties
hereto agree to render to each other such assistance as they may reasonably
require of each other in order to ensure the proper and adequate defense of any
such action, suit or proceeding.
(b) The Indemnifying Person shall not make any settlement
of any action, suit or proceeding without the written consent of the Indemnified
Persons, which consent shall not be unreasonably withheld; provided, however,
that in the event the Indemnified Persons refuse to consent to a settlement
acceptable to the Indemnifying Person which is capable of settlement by the
payment of money only and the Indemnifying Persons shall demonstrate to the
reasonable satisfaction of the Indemnified Persons their ability to pay such
amount, the Indemnifying Person may pay the amount of the proposed settlement to
the Indemnified Persons and shall thereupon be released from any further
liability with respect to such action, suit or proceeding.
6.5. Survival of Representations, Warranties and Covenants.
The representations and warranties of the Seller contained in
Section 3.1 and the representations and warranties of the Buyer contained in
Section 3.2 shall survive the Closing and shall terminate forty-five (45) days
following the first anniversary of the Closing Date; provided, however, that the
representations and warranties of the Seller set forth in
-23-
Sections 3.1(a), 3.1(b), 3.1(c) and 3.1(e), and the representations and
warranties of the Buyer set forth in Sections 3.2(a) and 3.2(b), shall survive
the Closing and remain in full force and effect until the expiration of the
statute of limitations, if any, applicable to the matters set forth therein (and
indefinitely, if none).
ARTICLE VII
NON-COMPETITION
The parties hereby acknowledge that they have entered into an
agreement regarding non-competition, as set forth in Section 16 of the
Management Services Agreement.
ARTICLE VIII
REPURCHASE OF ASSETS
The Purchased Assets, except for the Accounts Receivable, are
subject to repurchase by the Seller from the Buyer upon termination or
rescission of the Management Services Agreement in accordance with Section 13.5
or 14.1, respectively, of the Management Services Agreement.
ARTICLE IX
AMENDMENT, MODIFICATION AND WAIVER
This Agreement shall not be altered or otherwise amended
except pursuant to an instrument in writing signed by each of the parties. The
waiver by one party of the performance of any covenant, condition or promise
shall not invalidate this Agreement, nor shall it be considered as a waiver by
such party of any other covenant, condition or promise. The delay in pursuing
any remedy or in insisting upon full performance for any breach or failure of
any covenant, condition or promise shall not
-24-
prevent a party from later pursuing any remedies or insisting upon full
performance for the same or any similar breach or failure.
ARTICLE X
MISCELLANEOUS
10.1. Transfer Taxes, Etc.
The Seller and the Buyer shall each pay one-half (1/2) of all
sales, use and excise taxes and all registration, recording or transfer taxes
which may be payable in connection with the transactions contemplated by this
Agreement.
10.2. Entire Agreement.
This Agreement (including the recitals hereof and the
Schedules and the Exhibits attached hereto), together with the Related
Agreements referenced herein, contains the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and supersedes all
prior agreements, representations, warranties and understandings, either oral or
written, between the parties with respect thereto.
10.3. Descriptive Headings.
Descriptive headings are for convenience only and shall not
control or affect the meaning or construction of any provisions of this
Agreement.
10.4. Notices.
All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by telecopier, sent by
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nationally-recognized overnight courier, sent by certified mail, postage
prepaid, return receipt requested, addressed as follows:
(a) if to the Buyer, to:
Bone, Muscle and Joint, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000;
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Held, Esq.
Telecopier: (000) 000-0000; and
(b) if to the Seller, to:
Lauderdale Orthopaedic Surgeons
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxxx, M.D.
Telecopier: (000) 000-0000;
with a copy to:
Xxxxx & Menkhaus, P.A.
0000 X. Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Telecopier: (000) 000-0000;
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered if
personally delivered or sent by telecopier, (ii) on the Business Day after
dispatch if sent by nationally-recognized, overnight courier and (iii) on the
fifth Business Day after dispatch, if sent by mail. As used herein, "Business
Day" means a day that is not a Saturday, Sunday or a day on which banking
institutions in Florida are not required to be open.
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10.5. Counterparts.
This Agreement may be executed in any number of counterparts,
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
10.6. Bulk Sales Compliance.
The Buyer hereby waives compliance by the Seller with the
provisions of the "bulk sales laws" of any state which may be applicable to the
transactions contemplated hereby; provided, however, that the Seller shall
indemnify the Buyer in connection with such noncompliance to the extent provided
in Article 6 hereof.
10.7. Governing Law; Jurisdiction.
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Florida without giving effect to the
laws and principles thereof, or of any other jurisdiction, which would direct
the application of the laws of another jurisdiction. The parties to this
Agreement agree that jurisdiction and venue in any action brought pursuant to
this Agreement by any party hereto may lie in any Federal or state court located
in Broward County, State of Florida; provided, however, that any such party may
also seek jurisdiction and venue in another jurisdiction. By execution and
delivery of this Agreement, the parties hereto irrevocably submit to the
jurisdiction of such courts for themselves and in respect of their property with
respect to such action. The parties hereto irrevocably agree that venue would be
proper in such court, and hereby waive any objection that such court is an
improper or inconvenient forum for the resolution of such action. The parties
hereto shall act in good faith and shall refrain from taking any actions to
circumvent or frustrate the provisions of this Agreement.
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10.8. Attorneys' Fees.
In the event of any dispute or controversy arising out of or
relating to this Agreement, the prevailing party shall be entitled to recover
from the other party all costs and expenses, including attorneys' fees and
accountants' fees, incurred in connection with such dispute or controversy.
10.9. Benefits of Agreement.
The terms and provisions of this Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. Anything contained herein to the contrary notwithstanding,
this Agreement shall not be assignable by any party without the consent of the
other parties hereto, and any purported assignment without such consent shall be
null and void.
10.10. Pronouns.
As used herein, all pronouns shall include the masculine,
feminine, neuter, singular and plural thereof whenever the context and facts
require such construction.
* * * *
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Asset Purchase Agreement to be executed on its behalf effective as of the day
and year first above written.
BONE, MUSCLE AND JOINT, INC.
By:____________________________
Name:
Title:
LAUDERDALE ORTHOPAEDIC SURGEONS
By:______________________________
Name:
Title:
SCHEDULE 1.1(a)
Medical Equipment
SCHEDULE 1.1(b)
Furniture, Furnishings,
Trade Fixtures, and Office Equipment
SCHEDULE 1.1(c)
Equipment Leases
SCHEDULE 1.1(d)
Supplies
All of the medical supplies, office supplies, postage, and
printed materials owned by the Seller and located on the premises of any of the
Seller's offices at 12:01 a.m. on the Closing Date hereunder.
SCHEDULE 1.1(e)
Accounts Receivable
All of the Accounts Receivable of the Medical Group the
payment of which would constitute "Collections" as defined in Section 5.3(c)(ii)
of the Management Services Agreement, determined as of 12:01 a.m. of the
Closing Date hereunder.
SCHEDULE 1.1(f)
Office Leases
SCHEDULE 1.1(g)
Deposits
1. Security deposits under leases of offices
located in _____________ (Schedule 1.1(f),
items #1 and #2) $ _______
2. Security deposit under lease of office
located in ________ Schedule 1.1(f), item #3 $ _______
$ _______
SCHEDULE 1.1(h)
Additional Items
SCHEDULE 2.2
Allocation of Purchase Price
Medical Equipment, Furniture, Furnishings,
Trade Fixtures, and Office Equipment $ 250,000.00
Supplies $ 0.00
_______ Percent (__%) of the estimated
collectible amount of Accounts Receivable,
subject to adjustment in accordance with
Section 2.3 $2,000,000.00
Deposits $ 0.00
TOTAL: $2,250,000.00
SCHEDULE 3.1(c)
Claims
SCHEDULE 3.1(d)
Litigation
EXHIBIT A
XXXX OF SALE
LAUDERDALE ORTHOPAEDIC SURGEONS, a Florida general partnership
(the "Seller"), hereby sells, conveys, transfers, assigns and delivers to BONE,
MUSCLE AND JOINT, INC., a Delaware corporation (the "Buyer"), the following
assets, properties, interests in properties and rights of the Seller
(collectively, the "Purchased Assets"):
1. the medical equipment owned by the Seller and listed on
Schedule 1.1(a) of that certain Asset Purchase Agreement between the Seller and
the Buyer entered into as of the date hereof (the "Asset Purchase Agreement");
2. the furniture, furnishings, trade fixtures, and office
equipment owned by the Seller and listed on Schedule 1.1(b) of the Asset
Purchase Agreement;
3. the Seller's rights and interests under the equipment
leases identified on Schedule 1.1(c) of the Asset Purchase Agreement, subject to
the Buyer's assumption of the obligations accruing thereunder from and after the
date hereof;
4. the supplies described on Schedule 1.1(d) of the Asset
Purchase Agreement;
5. the accounts receivable described on Schedule 1.1(e) of
the Asset Purchase Agreement;
6. the Seller's rights and interests under the office
leases identified in Schedule 1.1(f) of the Asset Purchase Agreement, subject to
the Buyer's assumption of the obligations accruing thereunder from and after the
date hereof;
7. the deposits identified on Schedule 1.1(g) of the Asset
Purchase Agreement; and
8. any additional items identified on Schedule 1.1(h) of
the Asset Purchase Agreement.
All assets, properties, interests in properties, and rights of the Seller not
expressly identified above or in the schedules referenced in the Asset Purchase
Agreement (the "Excluded Assets") are expressly excluded from the assets of the
Seller being sold, assigned, or otherwise transferred to the Buyer.
To the extent that there is a conflict between the terms and
provisions of this Xxxx of Sale and the Asset Purchase Agreement, the terms and
provisions of the Asset Purchase Agreement shall prevail.
IN WITNESS WHEREOF, the Seller has executed this instrument as
of the 6th day of May, 1997, effective as of April 1, 1997.
LAUDERDALE ORTHOPAEDIC SURGEONS
By:______________________________
Name:
Title:
EXHIBIT B
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of May 6,
1997, between LAUDERDALE ORTHOPAEDIC SURGEONS ("Assignor") and BONE, MUSCLE AND
JOINT, INC. ("Assignee").
A. Pursuant to the terms of the Asset Purchase Agreement dated
as of the date hereof (the "Asset Purchase Agreement"), between Assignor, as
Seller, and Assignee, as Buyer, Assignor has concurrently with the delivery
hereof, sold, conveyed, transferred, assigned and delivered to Assignee certain
assets of Assignor (the "Purchased Assets"), which are specifically identified
in the Asset Purchase Agreement.
B. In partial consideration of the Purchased Assets, the Asset
Purchase Agreement provides that Assignee shall assume certain liabilities of
Assignor, identified in Section 1.3 of the Asset Purchase Agreement.
NOW, THEREFORE, Assignor and Assignee hereby agree as follows:
1. Assignment; Assumption.
Assignor hereby assigns, transfers and delivers to Assignee,
and Assignee does hereby accept, all of Assignor's rights, titles, and
interests, legal and equitable, in, to and under the equipment leases identified
in Schedule 1.1(c) of the Asset Purchase Agreement and the office leases
identified in Schedule 1.1(f) of the Asset Purchase Agreement (the "Assigned
Contracts"), and Assignee agrees to assume and to pay when due, those
liabilities accruing from and after the date hereof under the Assigned Contracts
and to observe, perform, and comply with the covenants, restrictions,
limitations, and conditions imposed upon Assignor under the Assigned Contracts;
provided, however,
that any and all obligations and liabilities arising under any such lease as of
or prior to the Closing Date and any and all obligations and liabilities arising
out of or in connection with the Seller's breach of any such lease shall, in
each case, remain the obligations and liabilities of the Seller.
2. Limitation of Assumption.
2.1 Right to Contest Obligations.
Nothing contained in this Agreement shall require that
Assignee perform, pay or discharge any obligation expressly assumed hereby so
long as Assignee shall in good faith contest or cause to be contested the amount
or validity thereof.
2.2 Obligations Not Assumed.
Other than as specifically stated above, Assignee is not
assuming any liabilities or obligations of the Assignor (whether fixed or
contingent, known or unknown, matured or unmatured).
To the extent there is a conflict between the terms and
provisions of this Assignment and Assumption Agreement and the Asset Purchase
Agreement, the terms and provisions of the Asset Purchase Agreement shall
prevail.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement as of the date first above written.
LAUDERDALE ORTHOPAEDIC SURGEONS
By:______________________________
Name:
Title:
BONE, MUSCLE AND JOINT, INC.
By:______________________________
Name:
Title:
